Have you played Zenki? Zenki kind of hinted at what the PCFX might be capable of graphics-wise in a 2D platformer environment. There are some shots in that game you'd swear were polygons (most likely pre-rendered stuff, but still nice) mixed with really nice "pixel art". I think had programmers pushed the system like they did the Turbo/PCE, we could've seen many things on par with what the PS1 and Saturn offered just as you suggest. Zenki and MegaMan X4, for example, are quite similar graphically.
Trouble is, the system died an early death and most of the programmers focused on exploiting the FMV qualities of the console in making digital comics instead of 2D platformers or shooters.
Most of the graphics in Zenki FX look like PC Engine graphics. Like they were even using the PCE's pallete(
kinda like the PCE'ish graphics in Kakutoden).
I think that a very similar looking port could've been made for PCE or that the PC-FX game may very well be a scrapped PCE game ported to PC-FX.
Of course, if you judge graphics not by the actual, you know,
graphics, instead by layers like many people do, then Zenki FX is more of a
Genesis game.

Well, I thought Saturn FMV using TrueMotion (Fighters Megamix, Virtual On, Last Bronx) didn't look half bad. Too bad this wasn't used for most of their games.
Cinepak, on the other hand, was really quite horrible -- though there were a couple exceptions (Enemy Zero and Eve Series games). I recall being pretty damn amazed by Playstation FMV after after having only played the Saturn for so long.
It really depends on the developer. Tengai Makyo IV uses Cinepak and its some of the very best quality fmv on PSX or Saturn(
and its full screen).